Diesel price high due to surge in global demand — Chong

A vehicle getting refueled at a petrol station. — DayakDaily.com file pic. // Photo: Pixabay

KUCHING, Feb 3: The steady high price of diesel in the country is probably due to the surge in global demand for the fuel.

Deputy Minister of Domestic Trade and Consumer Affairs Chong Chieng Jen said according to the Mean of Platts Singapore (MOPS), which Malaysia bases its fuel price on, diesel price had been at about US$2 to US$3 per barrel more expensive than the MOPS RON95 price.

“However, the profit margin allowed to be charged by local petrol stations for the sale of diesel is much lower than the profit margin for the sale of RON95, thus resulting in diesel being cheaper than RON 95,” he said in a statement today.

Chong explained that in the last few weeks, MOPS diesel prices had increased to more than US$10 per barrel more expensive than MOPS RON95 prices.

Therefore, despite the lower profit margin for diesel sold at local petrol stations, diesel price at petrol stations became higher than that for RON95.

“This explains the reason why of late, our RON95 pump prices became cheaper than the diesel pump prices.”

Yesterday, RON95 was at a price of RM1.93 per litre (down five sen from the previous week), while RON97 at RM2.23 per litre (also down five sen from the previous week).

As for Euro 2M diesel, it continued to be priced at RM2.18 per litre, while Euro 5 diesel, which is always 10 sen more than standard diesel, remains at RM2.28 per litre.

These prices would be in effect until Feb 8, when the next set of fuel price adjustments will be announced.

This is the fifth week this year of the weekly fuel price format, which is set to be announced every Friday. The prices will be effective from Saturday until the following Friday.

On a side note, Chong explained that the diesel and petrol prices in Malaysia petrol stations were tied to the MOPS prices for diesel and petrol.

“Means of Platts Singapore (MOPS) is a pricing basis for many refined products in Southeast Asia. It refers to the average prices reported by the price assessment agency Platts for a refined product in the Singapore trading hub.

“For most refined products, MOPS is the benchmark price for the Asia market,” he said.

Chong added that it was mainly determined by the international demand and supply for different types of refined products like diesel, RON95, RON97 and other petroleum products. — DayakDaily